MarketsFarm — Canadian lentils should benefit from India lowering its import levy on lentils from 30 to 10 per cent, said Marlene Boersch of Mercantile Consulting Venture Inc. in Winnipeg.
The announcement, made June 2, was intended to reduce lentil prices in the country. India’s Ministry of Agriculture and Farmers’ Welfare estimated the lentil crop would come in at 1.44 million tonnes, up 17 per cent from last year’s production. Despite that forecast, lentil prices in India shot up 24 per cent.
The levy drop to 10 per cent applies to all exporters except the United States, which saw its tariff reduced from 50 to 30 per cent. Boersch said that will give Canadian and Australian lentils an advantage, even if it’s temporary. She pointed out the reduction in the levy lasts until Aug. 31.
“I suspect they’re doing that because they’re not quite sure on what the ongoing crop looks like,” she said. “They want to see how big our crop is and play it a little bit safe.”
Since the announcement, she said red lentils reached 31 cents/lb., but have topped off. Given the temporary nature of the levy cut, she said it would primarily benefit old-crop lentils.
Nevertheless it’s “a very positive sign with some nice selling opportunities,” Boersch said.
At this point in the 2019-20 crop year, Canada has exported about 400,000 tonnes of lentils to India, according to customs data. That accounted for 26 per cent of Canada’s lentil exports.
— Glen Hallick reports for MarketsFarm from Winnipeg. Includes files from Phil Franz-Warkentin.